What is plusvalía municipal, exactly?
Plusvalía municipal (full name: Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana, IIVTNU) is a local council tax on the increase in the cadastral land value of an urban property during the years you owned it. It is charged by the town hall (ayuntamiento), not the national tax agency.
Crucially, it taxes only the land portion of the cadastral value — not the building. And it is completely separate from the national capital-gains tax non-residents pay (IRNR). On the same sale you can owe both, calculated on different bases, paid to different authorities.
The 2021 Constitutional Court ruling changed everything
On 26 October 2021 Spain's Constitutional Court struck down the old objective formula as unconstitutional because it taxed phantom gains — you could owe plusvalía even when you sold at a loss. The government responded with Real Decreto-ley 26/2021, which introduced two calculation methods. You may pick whichever produces the lower bill.
- Método objetivo (formula): cadastral land value × statutory coefficient (set by year held) × municipal rate (up to 30%).
- Método real (actual gain): the real difference between purchase and sale price, multiplied by the land's share of the cadastral value, then × the municipal rate.
A worked example
A flat in Madrid held 10 years, cadastral land value €40,000, with roughly a €30,000 increase in land value over the period. Madrid applies the maximum 30% rate.
- Objetivo: €40,000 × coefficient × 30% lands around €2,700–4,500 depending on the year's coefficient.
- Real: actual gain × land share × 30% — often lower if your real gain was modest.
Run both. The difference between methods on a single sale can easily be four figures.
Deadlines and who pays
The seller pays plusvalía on a normal sale. The deadline is tight:
- Sale: 30 working days from the deed signing.
- Inheritance: 6 months (extendable to 1 year on request).
- Late filing: surcharges start at 5% and climb.
Non-residents have exactly the same liability as residents — there is no nationality discount on plusvalía.
How it fits with the other Spanish selling taxes
Plusvalía is only one line. As a non-resident seller you also face IRNR capital-gains tax (19% for EU/EEA sellers, 24% for non-EU on the gain) and the buyer withholds 3% of the price (retención) on account of your IRNR. Budget all three together, not separately.
On the buying side, the equivalent transaction tax is ITP — see our breakdown in the non-resident property tax guide, and the wider Spain foreign-buyer guides for holding-cost context.
Thinking about selling, or modelling the round-trip before you even buy? Run the property through Outpost — the dossier estimates the all-in cost both ways, including a plusvalía range for the district. Start with the sample dossier to see the format.